Human Resource Management
Business Ethics and Corporate Social Responsibility
1) Bernard Madoff was most likely able to accomplish his Ponzi scheme because ______.
A) politicians protected his securities firm
B) laws failed to regulate bond investments
C) investors did not question his high returns
D) police were unable to find sufficient evidence
Answer: C
Explanation: C) Madoff's case involved providing a consistent 10 percent to 12 percent annual returns in good markets and bad. People did not question him. Investors wanted to believe in the Holy Grail, so rational thoughts did not interfere with disbelief.
2) All of the following changes have been implemented by the SEC as a result of the Madoff scandal EXCEPT ______.
A) requiring investors to register each trade with the government
B) expanding the technology budget to improve enforcement
C) rewarding individuals for cooperating with investigations
D) establishing five specialized enforcement units
Answer: A
Explanation: A) As a result of the Madoff scandal, the SEC expanded its budget for use on key technology projects that will restructure vulnerable areas in its regulatory system and improve its enforcement division.The reforms include a so-called "Seaboard Memo for individuals" spelling out how they will be rewarded if they cooperate in investigations. There will also be five specialized enforcement units to tackle crimes such as Ponzi schemes, bribery, and insider trading.
3) Which term refers to the discipline that deals with what is good and bad or right and wrong?
A) morals and traditions
B) social responsibility
C) cultural norms
D) ethics
Answer: D
Explanation: D) Ethics is the discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation.
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4) Which of the following firms has NOT been exposed for ethical and often illegal exploits?
A) Enron
B) Arthur Andersen
C) WorldCom
D) Charles Schwab
Answer: D
Explanation: D) Enron, Arthur Anderson, and WorldCom have been involved with ethical and illegal problems. Charles Schwab has a history of honesty and transparency.
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5) In a recent survey, what percent of investors said they would move their account if they discovered the company was involved in unethical behavior?
A) 17%
B) 37%
C) 67%
D) 97%
Answer: C
Explanation: C) CEOs have to be clear that unethical behavior is not acceptable. In one survey, 67 percent of investors said they would move their account if they discovered the company was involved in unethical behavior.
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6) The CEO of GE begins and ends each annual meeting by ______.
A) introducing the firm's senior officials
B) reviewing the firm's financial details
C) stating the firm's integrity principles
D) asking stockholders for their opinions
Answer: C
Explanation: C) Jeff Immelt, GE's CEO, begins and ends each annual meeting of 220 officers and of its 600 senior managers by restating the company's fundamental integrity principles: "GE's business success is built on our reputation with all stakeholders for lawful and ethical behavior. Commercial considerations never justify cutting corners. Upholding this standard is the specific responsibility of the leaders in the room."
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7) What do most of the 500 largest corporations in the United States have?
A) social responsibility audits
B) environmental audits
C) codes of ethics
D) podcasts
Answer: C
Explanation: C) Most of the 500 largest corporations in the United States now have a code of ethics, which encompasses written conduct standards, internal education, and formal agreements on industry standards, ethics offices, social accounting, and social projects.
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8) With regards to ethics, most of the 500 largest corporations in the U.S. now have a code of ethics. Which of the following would LEAST likely be included in the codes?
A) ethics offices
B) social accounting
C) conduct standards
D) performance appraisals
Answer: D
Explanation: D) Most of the 500 largest corporations in the United States now have a code of ethics, which encompasses written conduct standards, internal education, and formal agreements on industry standards, ethics offices, social accounting, and social projects.
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9) What ethical breaches in business today have involved hundreds of executives and led to numerous high-profile resignations?
A) stock-options-backdating
B) excessive severance pay
C) unethical salaries
D) insider trading
Answer: A
Explanation: A) Ethical breaches in business continue today. Stock-options-backdating has involved hundreds of executives and led to the resignations of some high-profile executives.
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10) What was the primary focus of many financial firms involved in the 2008/10 financial crisis?
A) human resources
B) short-term profits
C) customer service
D) long-range returns
Answer: B
Explanation: B) Companies that focused on short-term profits seemingly to the exclusion of everything else were the culprits of the 2008/10 financial crisis. Other organizations had a steady moral compass and went safely through it. Charles Schwab & Co. and US Bancorp have largely avoided the financial disaster because they both focus on customer service, honesty, and transparency.
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11) Which of the following is a strategy used by Costco?
A) outsourcing all administrative tasks to reduce HR costs
B) focusing on short-term profits to benefit stockholders
C) offering the CEO a high salary and few stock options
D) paying high wages to retain good employees
Answer: D
Explanation: D) For years, Wall Street analysts have criticized Costco's management for paying high wages and keeping employees around for a long time, but Costco's CEO believed that it was strategic for long term growth and success to keep good employees. The CEO gets a compensation package that includes a relatively low salary and bonus but a much larger amount in stock options.
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12) The minimum standards of ethical behavior in a firm are based on ______, while higher standards are established by ______.
A) corporate policies; human resources
B) co-workers; mission statements
C) organizational culture; laws
D) laws; corporate leadership
Answer: D
Explanation: D) Compliance with the law sets the minimum standard of ethical behavior; ethics is much more, however. There must be leaders who are able and willing to instill ethics throughout the culture of the organization because laws are only the beginning of the solution.
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13) According to the text, sources of ethical guidance and personal beliefs are the basis for ______.
A) the model of ethics
B) economic modeling
C) behavior modeling
D) the model of philosophy
Answer: A
Explanation: A) According to the model of ethics, a person or organization is ethical if two relationships are strong and positive. The two elements of the relationship are sources of ethical guidance and personal beliefs about right and wrong.
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14) According to the text, what are the two key elements in the model of ethics?
A) moral background and cultural norms
B) sources of ethical guidance and personal moral beliefs
C) social awareness and cultural norms
D) sources of ethical guidance and education level
Answer: B
Explanation: B) According to the model of ethics, a person or organization is ethical if two relationships are strong and positive. The two elements of the relationship are sources of ethical guidance and personal beliefs about right and wrong.
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15) Which of the following would LEAST likely be a source of ethical guidance?
A) holy books
B) laws
C) friends
D) tests
Answer: D
Explanation: D) One might use a number of sources to determine what is right or wrong, good or bad, moral or immoral. These sources include the Bible and other holy books. Another source of ethical guidance is the behavior and advice of our parents, friends, and role models. Laws also offer guidance to ethical behavior, prohibiting acts that can be especially harmful to others.
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16) As a professional, what should be your primary source of ethical guidance in the workplace?
A) corporate HR policies
B) corporate code of ethics
C) corporate mission statement
D) corporate procedures
Answer: B
Explanation: B) For most professionals, there are codes of ethics that prescribe certain behavior. Without this conscience that has developed it might be easy to say, "Everyone does it," "Just this once won't hurt," or "No one will ever know."
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17) Which term refers to the strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct?
A) Type I ethics
B) Type II ethics
C) Type III ethics
D) Type IV ethics
Answer: A
Explanation: A) The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics. Type II ethics is the strength of the relationship between what one believes and how one behaves.
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18) Jeff, a manager at Quik Electronics, believes it is acceptable to not hire minorities, despite the fact that almost everyone condemns this practice. Jeff is unethical based on ______.
A) Type I ethics
B) Type II ethics
C) Type III ethics
D) Type IV ethics
Answer: A
Explanation: A) The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics. Type II ethics is the strength of the relationship between what one believes and how one behaves.
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19) The manager of a computer firm believes it is acceptable to bribe government officials, despite the fact that such actions are illegal. Which type of ethics suggest that the manager is unethical?
A) Type I
B) Type II
C) Type III
D) all of the above
Answer: A
Explanation: A) The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance, such as laws, suggest is morally correct is Type I ethics. Type II ethics is the strength of the relationship between what one believes and how one behaves.
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20) Type I ethics is best defined as the strength of the relationship between ______.
A) an individual's moral beliefs and the individual's behavior
B) morals presented by external sources and the punishment for unethical acts
C) an individual's moral beliefs and the morals presented by external sources
D) morals exhibited by most of society and the unethical actions of friends and role models
Answer: C
Explanation: C) The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance, such as laws, suggest is morally correct is Type I ethics. Type II ethics is the strength of the relationship between what one believes and how one behaves.
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21) Type II ethics is best defined as the strength of the relationship between ______.
A) an individual's moral beliefs and the individual's behavior
B) morals presented by external sources and the punishment for unethical acts
C) an individual's moral beliefs and the morals presented by external sources
D) morals exhibited by most of society and the unethical actions of friends and role models
Answer: A
Explanation: A) The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance, such as laws, suggest is morally correct is Type I ethics. Type II ethics is the strength of the relationship between what one believes and how one behaves.
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22) The strength of the relationship between what one believes and how one behaves is referred to as what type of ethics?
A) Type I
B) Type II
C) Type III
D) Type IV
Answer: B
Explanation: B) Type II ethics is the strength of the relationship between what one believes and how one behaves. The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics.
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23) What type of ethics is involved when a HR manager knows that it is wrong to discriminate but does so anyway?
A) Type I
B) Type II
C) Type III
D) Type IV
Answer: B
Explanation: B) Type II ethics is the strength of the relationship between what one believes and how one behaves. The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics.
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24) What type of ethics is involved if a board of directors considers it wrong to pay excessive salaries to the CEO, yet pays executive salaries that are outrageous?
A) Type I
B) Type II
C) Type III
D) Type IV
Answer: B
Explanation: B) Type II ethics is the strength of the relationship between what one believes and how one behaves, such as in the example provided. The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics.
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25) What type of ethics is involved if a manager knows that it is wrong to pay bribes yet decides to pay bribes anyway?
A) Type I
B) Type II
C) Type III
D) Type IV
Answer: B
Explanation: B) Type II ethics is the strength of the relationship between what one believes and how one behaves, such as in the example provided. The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics.
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26) Generally, people are considered ethical if they possess ______.
A) either Type I or Type II ethics
B) either Type II or Type III ethics
C) both Type I and Type II ethics
D) both Type 1 and Type III ethics
Answer: C
Explanation: C) Generally, a person is not considered ethical unless the person possesses both types of ethics. The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics. Type II ethics is the strength of the relationship between what one believes and how one behaves, such as in the example provided.